The Egyptian government is preparing a social protection package to absorb the effects of rising prices
The Egyptian government is about to complete the preparation of a new recovery plan offering social protection to citizens, especially to groups most affected by price hikes and rising local inflation.
Government sources said the Ministry of Finance has prepared scenarios in this regard, but did not mention the magnitude of its cost.
He confirmed that he will not impose more burdens on the general state budget in terms of financing.
The sources added that intervention is a duty of the state to deal with the repercussions of the effects of rising prices through measures which are currently being carefully considered and which the government is about to publish.
Exceptional measures have recently been taken to deal with the repercussions of the Russian-Ukrainian war on the Egyptian economy at an early stage, and the public treasury has borne its burdens, including those related to salaries and bonuses.
They continued, “Studies are continuing on developments at all levels and changes on a weekly and monthly basis, and there is a newly formed ministerial committee to monitor the economic situation. This committee constantly evaluates the position on an ongoing basis.
Support for initiatives
According to the sources, the cash support initiative – Takaful and Karama – will be expanded, along with support for ration cards.
The sources stressed that there will be no increase in existing taxes and that non-traditional income will be sought.
The fourth chapter of the state budget on support, subsidies and social benefits will be increased with additional allocations to finance the new package and rationalize expenditure, in addition to directing the financial savings made through the subsidy of products oil companies in the budget towards social protection programs.
The head of the parliament’s planning and budget committee, Fakhry al-Fiqi, revealed that the program for obtaining a new loan from the International Monetary Fund has been reformulated, in the light of the evolution of the indicators of the Egyptian economy, in the context of the repercussions of the current global economic crisis and the Russian invasion of Ukraine.
According to Fiqi, it was planned to secure the loan in the past with the aim of completing the structural reform program in Egypt, which was launched by the government in June last year.
Fiqi said it may be appropriate to take into account new economic developments and the repercussions of the crisis locally, especially since the indicators of the Egyptian economy were stable when the program was implemented in the past. at all levels.
The indicators began to be affected with the start of the second half of the past financial year.
Fiqi predicted that the funding available for Egypt will be limited this time, while it is estimated to be between five and seven billion US dollars.
He indicated that negotiations are currently underway between the two parties on many issues with a view to taking prior measures from the government before the signing.
The sources, who spoke on condition of anonymity, expected a deal with the Fund to be reached in August, amid assurances that the social dimension would be factored into the repercussions of the upcoming measures.